Rise of the Philanthropreneur: How Founders Are Finding Success While Doing Good

We’re currently undergoing a transformation in how entrepreneurs define success, driven by a generation of founders who are both ambitious for commercial success, and highly aware of the serious problems facing our world.

We’ve come to accept how detrimental to the planet the old ways of doing business are, and the most industrious among us have begun turning this picture on its head. At my company Superhero Academy, we use the term philanthropreneurs, and the question that defines us is:

“Can an entrepreneur run a profitable business and benefit the world?”

We believe the answer is yes, and this growing approach to business has led to the rise of companies like Tom’s Shoes, one of the best-known innovators out there in merging philanthropy and keen business sense. When explaining just what we mean by a philanthropreneur, Tom’s offers a great illustration.

It’s a simple premise you’re probably familiar with—for every pair sold, Tom’s Shoes gives another pair away to someone in need. The company had, by 2015, given over 1 million shoes away in more than 60 countries, not an insignificant expense. But in return, they found a solid standing among a generation of consumers looking for ways to make a difference, ensuring return customers, high demand, and publicity worth far more than what they might spend on the extra pairs of shoes.

In fact, despite their giveaways, Tom’s Shoes earned a valuation of $625 million by Reuters, signaling to the world the serious potential in this new way of doing business.

With more people seeking to run businesses that will benefit the world, their employees, and shareholders all at once, it’s important to understand what makes a good philanthropreneur, and how embracing this approach can change your own business for the better.

In the following, we’re going to unpack where this approach to business came from, how the best practitioners are doing it right, and how you yourself can get started right away.

How It Began

For many people coming of age in my generation, the future looked bleak. The realities of the most troubled parts of the world were coming to light. The internet was breaking many out of their small-world mentalities, companies like Nike were being outed for exploiting horrendous practices like sweatshop labor, and Al Gore along with thousands of scientists were trying to get the word out about human-caused climate change long before it was cool to care.

It’s hard to deny that businesses are frequently to blame for these global problems. But at the same time, entrepreneurs have always been leaders—they’ve sought out the problems that plagued people and found innovative solutions by offering new products, new services, and often entirely new mindsets and ways of life.

So as problems like environmental degradation and global poverty grew larger and more threatening, more entrepreneurs began to put their own self-interests aside in order to tackle these challenges collaboratively with those of similar minds.

And it wasn’t long before the financial benefits of adopting better practices became clear—chemical manufacturer DuPont saw savings of $6 billion over two decades by cutting their carbon emissions, for instance—and things began to change in many other boardrooms.

Companies, such as those featured on GameChangers 500 list of the top for-benefit corporations, began setting an example of what such a company really looked like, and more importantly to some, how wealthy it could become!

For many, Tom’s is the classic social change business. It’s so simple. One glance at their website makes it perfectly clear what they’re about. But the more recent philanthropreneurial projects go beyond such basic generosity to create structural, long-term impacts where it counts.

Prime examples are emerging, such as when Dan Price of Gravity Payments cut his own salary as CEO to the point where he could pay every employee an even “minimum wage” of 70,000 a year. That made a strong statement about the kind of world he wanted to live in. His statement could easily be argued he generated more great free press than he could have bought with dollars and cents.

Or when Recycle Bank partnered with a wide variety of large corporations to try and create incentives for consumers to utilize recycling programs, demonstrating that there were true win-win scenarios for each end of the production cycle. Of course you’re wondering, how does this apply to my business? How do we step up ourselves to take advantage of these trends in the market?

If you want to join the ranks of the budding philanthropreneurs, start by asking yourself some very simple questions:

What external benefits does or can your project bring to the world, and not just your consumers? How can you reduce your waste, provide better opportunities for your employees, or produce greater value for the world?

Once you’ve wrapped your head around these fundamental questions, you can start taking steps in the right direction. But how do you know if you’re doing it right? Well, it’s not always easy. In fact, early and passionate go-getters in this arena took some time to truly find their footing.

Finding Legitimacy

When this new way of thinking formed, the term “social entrepreneurship” was coined (this is basically interchangeable with what we call philanthropreneurism). Overused and under-defined, this term quickly became a catch-all for anyone trying to differentiate themselves from the traditional for-profit sector. This was a real problem for people trying to lead in this emerging field, and still can be.

Things got muddier with the increasing public awareness of things like “greenwashing.” Suddenly, a company could drive a large influx of traffic just by slapping the word “eco” on a bottle in bright green lettering, or vaguely painting a facade of caring in their ad campaigns.

If said company could make even the weakest argument about how their company was cutting energy costs or reducing waste, they could proudly wear a label that would keep them competitive in this foreign landscape.

To the environmentally conscious, the “green” movement was a mixed bag of halfhearted measures and largely broken promises, but it made a strong case for the fact that the nature of competition was changing. Low prices clearly weren’t enough to sway consumers alone if they came at the cost of the health of our planet.

Fortunately, some structures emerged to bring clarity to the issue. For one, a new type of corporation filing became available, called Benefit Corporation, or B-Corps.

Benefit Corporations are relatively new, but already more than 30,000 companies have filed, or changed their filings, under this new moniker. In essence, they are for-profit businesses that are able to include positive impacts on the planet and society as legally sanctioned goals, rather than focusing entirely on increasing revenue or shareholder earnings.

Websites like Benefitcorp.net blossomed to provide in-depth explanations of the reasoning behind, and process of, either founding a B-Corp or changing an existing corporation. What started as a subtle change of focus is becoming a formal structure of benefit-driven policy.

And as the system became more formalized, entities like GameChangers 500 popped up to lend even more credibility—ranking, assessing, and evaluating the progress of new and adapting companies in terms that could make sense to anyone.

Most importantly, GameChangers is creating an easily understood system under which people can explore and experiment with the rewards and solutions of companies looking to create public benefit. It’s easier than ever for you to understand who’s doing this right and how they’re doing it.

Take a look at the nine badges GameChangers awards for-benefit companies—they are nine easy targets to aim for in every aspect of business or project planning.

But the rewards go far beyond badges. As these terms and classifications have become better-defined, companies operating on a for-benefit model have been able to document significantly higher millennial recruitment rates, and even boast a 125% lower burnout rate for long-term employees. They become places where people want to work.

Not only is the work more gratifying, but the book Firms of Endearment, based on a 15-year study, proved that purpose-driven businesses outperform the S&P 500 by 14 times—a figure most CEOs would do anything to attain for their own businesses.

The reasons behind these massive benefits are complex, but the simple explanation stands to reason: When people are passionate about what they do, they tend to do the work a lot better. These companies are more likely to innovate, and their workers are much less likely to just punch a timecard.

How to Become a Philanthropreneur

The strength of a philanthropreneur doesn’t lie just in that they care. It lies in the limitless capacity of an entrepreneur capable of utilizing collaboration and social ingenuity to their full benefit.

It’s long been known that those natural born innovators and leaders—the Teslas, Jobs, Gates, Winfreys, and Musks of the world—were able to take the word impossible away from the most incredible feats. In the last 50 years alone, technology and communications have been vastly improved by people discontent with doing more of the same, driven by their ambition to create something new. Entrepreneurs have demonstrated a tremendous ability to change the world.

Too often though, these companies have been reduced to moneymakers. Apple, for instance, has more wealth than the GDP of many of the world’s countries, but despite their influence and tremendous success, they would barely rank in many of the measurements of GameChangers’ new system.

So what sets a philanthropreneur apart from the rest?

There’s one big criteria: The way they measure wealth.

A philanthropreneur doesn’t ignore profitability outright, but rather uses their ability to identify and meet needs to create mass appeal and tremendous value that stretches beyond company profit. This talent enables them to drive forward-thinking initiatives that genuinely make a positive impact on the planet.

There are four key principles a philanthropreneur abides by that allow them to not only create positive change, but outperform even the most cutthroat businesses.

1. Sustain To Thrive

A philanthropreneur is able to design systems in sustainable ways, thriving in long term strategic situations, and not limiting themselves to quarterly profit analytics as the only way to qualify their efforts.

This focus on long-term strategies is the first, and possibly most iconic trait of this new identity.

Amazon made history by founding itself on a loss-leader strategy so ambitious that they had no intent to turn a profit for their first seven years, and who now could dispute their rampant success as one of the leading digital marketplaces of the 21st century?

The ability to think several steps ahead allows a company to create a solid, expansive framework capable of preparing for economic upturns and downturns. If large innovations shake their industry, the company can be designed to mitigate the cost and adjust to new techniques, rather than suffering immediately due to a few poor quarterly results.

As a philanthropreneur, think in long-term strategies. Lay out a full plan toward accomplishing your goal and appeal to your investors and supporters with the value of taking the necessary pace.

Ask yourself:

What actions will make for better long-term customer relations, rather than lucrative short sales?

What policies will ensure that my company will be in business five, 25, or 100 years from now?

If my company is still around in 200 years, will it have depleted resources or created more? Does it take more than it gives?

2. ‘Me’ to ‘We’

For as long as mankind can remember, warriors fought under banners that reminded them that they stood for a cause, a country, a culture, a nation rather than just themselves.

These banners carry important associations with them, whether the Apple logo or the American flag. They help to define our identities and rally support behind common ideals or goals.

The contrast between thriving social enterprises and those stuck in the old model has everything to do with what their people are rallying behind. Even the most thriving modern corporations are composed mostly of employees who couldn’t care less about the company’s success. They work merely for their paychecks, above all else.

The philanthropreneur instead works for a cause, and if that cause is worthwhile, then anyone with compassion toward the same mission can rally under that collective flag.

That means empowering and encouraging their people to spread their unique gifts to the world, providing freedom to allow them to create and innovate for your organization—not because it’s their job—but because it’s their passion. Pride and passion are powerful emotions that you can’t buy or sell. You can only empower people to seize them.

You need to find your collective flag—what are you trying to accomplish that others would be willing to join you in?

What story do you have to tell to get others as inspired as you are?

A cause-centric mindset isn’t in competition with other projects, because it recognizes the value in accomplishing its goal. Not only can you rally your team members around a collective flag, but you can even find ways to work with would-be competitors if you can align your goals.

So think hard on your project. What does it have in common with other businesses, and how could you cooperate and share resources? What sort of people would be as passionate about seeing your business succeed as you are?

3. Measure What Matters

Though more collaborative in nature than a traditional company, a philanthropreneurial project isn’t devoid of competition. But when a philanthropreneur takes a look at a company, the analytics used to determine its strengths are very different.

How happy are your employees? Do they believe they have a voice in the company, and that their actions are contributing to the overall goal? How can you set up metrics to measure these things within your tribe?

How effective is your company at producing change? Are more people getting involved and talking about the project? Are people glad when your company turns its sights on a new community or region? Does your company drain, or replenish, the earth’s resources?

All of those questions are just a few of the criteria used to measure the strength and health of a philanthropreneur’s project. Of course, everyone still needs to get paid, and hemorrhaging money is never a good sign, but by changing the focus, a significant amount of flexibility can be utilized when making future decisions and assessing wellness.

The competitive drive is shifted under this mindset. Rather than trying to trample competition and possibly snuff out an idea that could have driven the industry further, each company strives to become the best version of itself. Success becomes determined by true effectiveness, rather than anti-competitive strategies like DRM, patent trolling, or frivolous lawsuits.

4. The Economics of Saving the World

Pursuing solutions to the world’s problems can be costly, and they can take a very long time to fully solve, but it’s not so simple that you can call them bad business decisions. Philanthropreneurs must take into account the ripple effects of their businesses.

Take Elon Musk’s Tesla for instance, a company that fought against all odds to create a masterful product. The oil and automotive industries are some of the most cutthroat and difficult to compete with, yet Tesla didn’t waver. By steadfastly believing in the positive potential of their product, they were able to create a product so superior that, despite its higher outright costs, it has tremendous value to society.

Solutions like Tesla’s are not just appealing as flashy products, they also hold inherent value in the form of positive externalities. People want to live in a healthier, safer, sustainable world, so they are willing to pay more to gain access to goods that allow them those “luxuries.”

This also reflects a company’s true bottom line. Rather than thinking merely of the ROI as return on investment, more benefit-driven companies can focus on “ripple of impact,” or the actual positive change brought about by their policies, services, or products.

This focus is essential in order to combat the same negative externalities that we’ve been treating as acceptable for generations—the depletion of our ozone and the deforestation of our most diverse habitats for instance. Though our manufacturing plants were highly lucrative, the societal costs were frequently too high to consider them truly successful.

All they accomplished was the lining of certain pockets, but at the expense of greater society.

A philanthropreneur is not a distinctly different creature than the traditional entrepreneur. One simply cannot forget that the costs and rewards of doing business are not exclusively in dollars and cents within your company’s walls.

Training The Next Generation

As young philanthropreneurs start to get their ambitions riled up, the question becomes, “Where do people go to learn the new game?”

Mainstream education isn’t there yet. Universities and corporate internships are still teaching the old game and techniques that have been outdated for decades.

But that doesn’t mean we are without options. Online education is booming, and many programs are trying out strategies that benefit all ends of the system.

For instance, check out Copy Blogger for all your content creation and web monetization needs. You can even pick up a my.copyblogger.com subscription completely for free with access to dozens of e-books and comprehensive documentation to get anyone started down the content marketing path.

Or if you’re looking for the latest innovative entrepreneurship initiatives, you’re already holding in your hands a powerful collection of articles designed around just that! Start taking notes, and ask yourself, “How can I learn from what this person has done? What could I do better?”

You can always look at Benefit Corp.net for more detailed information on the values of for-benefit business, and how to get started running your own.

And if you want comprehensive education on everything it takes to take your skills to the next level, or even just to get started becoming an entrepreneur, I’ve created the Superhero Academy to bring the Superhero out of everyday people.

We offer:

Free, tangible help at our educational content page in the form of comprehensive articles and podcasts

One-on-one coaching through any stage of a project

In-person, high-end boot camps designed to refine and focus your work ethic and project goal

A full year’s worth of courses and homework for those who join our Academy

And if you’re just looking to figure out your own goals, you could try the technique that literally changed my life, free. Try out making your own Impossible List.

You are limited by nothing more than what you believe you are. If you read this far thinking, “Man, I wish I could make a difference…” then let me be the first to say: You can succeed at anything with the right help and a lot of determination.

Having co-founded the Valhalla Movement Foundation – Marc Angelo is a character dedicated to having an impact. Defining success in unconventional measures he has earned a living by applying the skills of entrepreneurship and marketing for a cause. Marc Angelo is also the founder behind Superhero Academy which strives to empower social entrepreneurs and sustainable business leaders to be bold - dynamic - engaging storytellers - aka everyday superheroes - that will change the world through their actions and the movements they help inspire.